adoption of cryptoassets, bitcoin world's reserve currency, central bank digital currencies, Central Banks, Covid-19 pandemic., Cross Border Payment, Diem, Digital Currency, European Central Bank, Facebook, IMF, reserve currency, US Dollar

The IMF warns that central banks may have to rethink what constitutes their reserve currency holdings. In a recent study, the global lender points to the changing geopolitical landscape, technological advances and the impact of the Covid-19 pandemic as events likely to influence the composition of reserves.

Advances in Financial Technologies

In addition to the US dollar, other currencies like the Euro, the Japanese and the British pound act as settlement currencies in global trade. Still, the US dollar dominates when it comes to its status as the world’s reserve currency.

adoption of cryptoassets, bitcoin world's reserve currency, central bank digital currencies, Central Banks, Covid-19 pandemic., Cross Border Payment, Diem, Digital Currency, European Central Bank, Facebook, IMF, reserve currency, US Dollar

However, in a study, whose findings are shared via the global institution’s blog, the IMF does say that the pandemic inspired “advances in financial and payment technologies†will likely “impact the future composition of reserve holdings.â€

According to the authors of the blog, many central bankers are now aware of threats from private issuers of digital money, like Facebook’s Diem. Consequently, some central banks may be attempting to counter this threat by issuing their own digital currencies. The authors write:

Institutions like the European Central Bank and the People’s Bank of China, which are already “exploring the issuance of central bank digital currencies,†believe that their ultimate success on this front “could increase demand for their currencies.†In turn, this increased demand will accelerate the dumping of the US dollar as the preferred global reserve currency.

Superior Technology Prevails

Still, the IMF blog post reminds central bankers that simply issuing a digital currency is no guarantee of its acceptance as another reserve currency. Instead, only “superior technology platforms†can help new currencies “overcome some of the advantages of incumbent currencies.†The authors conclude their sentiments on this reserve currency subject saying:

Meanwhile, the blog also identifies the shifts in international finance, the changing trade links and invoicing practices as other factors that could propel the accelerated transformation of the reserve currency status quo.

Do you think the US dollar’s global dominance is coming to an end? Tell us what you think in the comments section below.

Du lịch nhật bản, hướng dẫn du lịch Nhật và đánh giá địa điểm Nhật Bản Japan travel news, japan travel guides, japan holiday destinations and japan reviews

RELATED NEWS

Hong Kong to Connect Digital Yuan With Domestic Payments System in Cross-Border Trials

Financial authorities in Hong Kong have announced a second phase of trials for mainland China’s digital currency. As part of the upcoming tests, the city will link the Chinese digital yuan to its domestic payments system to evaluate the CBDC’s usability in cross-border scenarios. Hong Kong Residents to Load E-CNY Wallets via Mobile Phones China […]

Xem chi tiết: Hong Kong to Connect Digital Yuan With Domestic Payments System in Cross-Border Trials

G7 Finance Chiefs to Publish Common Rules for State-Issued Digital Currencies This Year

The G7 finance ministers and central bank governors have met and agreed to work towards common principles for state-backed digital currencies and publish their conclusions this year. They said these digital currencies “could act as both a liquid, safe settlement asset and as an anchor for the payments system.†G7 Setting Common Rules for Central […]

Xem chi tiết: G7 Finance Chiefs to Publish Common Rules for State-Issued Digital Currencies This Year

Shanghai to Hand Out $3 Million in Digital Yuan Lottery

As part of government efforts to get the digital yuan going, authorities in Shanghai will distribute $3 million worth of the central bank-issued currency among residents of Shanghai. The digital money will be dispersed through a lottery, a method that has already been implemented elsewhere in China. Lottery Winners to Get 350,000 Digital Red Envelopes […]

Xem chi tiết: Shanghai to Hand Out $3 Million in Digital Yuan Lottery

Kalashnikov Eyes Digital Ruble Settlements as Russia Aims to Replace ‘Dirty Money’

Kalashnikov Group, the Russian firearms manufacturer, is ready to transition to settlements in digital currency. The announcement came from the international economic forum in Saint Petersburg where the central bank of Russia reaffirmed its intention to replace “dirty†and “infectious†paper cash with the digital ruble that’s currently under development. Russia’s Kalashnikov Concern Looks Forward […]

Xem chi tiết: Kalashnikov Eyes Digital Ruble Settlements as Russia Aims to Replace ‘Dirty Money’

Bank of Ghana ‘in the Advanced Stages of Introducing a Digital Currency’— Governor Repeats Anti-Cryptocurrency Claims

The governor of Ghana’s central bank, Ernest Addison, has said his institution is now “in the advanced stages of introducing a digital currency.†However, before its release into circulation, the digital currency—which is also known as the “e-cediâ€â€” will first have to go “through three phases.†Bank of Ghana’s Embrace of Emerging Fintechs In his […]

Xem chi tiết: Bank of Ghana ‘in the Advanced Stages of Introducing a Digital Currency’— Governor Repeats Anti-Cryptocurrency Claims

Bank of Ghana ‘in the Advanced Stages of Introducing a Digital Currency’— Governor Repeats Anti-Cryptocurrency Claims

The governor of Ghana’s central bank, Ernest Addison, has said his institution is now “in the advanced stages of introducing a digital currency.†However, before its release into circulation, the digital currency—which is also known as the “e-cediâ€â€” will first have to go “through three phases.†Bank of Ghana’s Embrace of Emerging Fintechs In his […]

Xem chi tiết: Bank of Ghana ‘in the Advanced Stages of Introducing a Digital Currency’— Governor Repeats Anti-Cryptocurrency Claims

ECB: Digital Euro to Boost Global Appeal of European Money, Fight ‘Artificial Currencies’

The digitization of traditional currencies like the euro has the potential to increase their international appeal, the European Central Bank says in a new report. A failure to offer a digital currency would endanger financial stability, ECB warns. The regulator is concerned about the prospect of tech giants dominating payments through their “artificial currencies.†Eurozone’s […]

Xem chi tiết: ECB: Digital Euro to Boost Global Appeal of European Money, Fight ‘Artificial Currencies’

European Union to Release Digital Wallet for Payments Next Year

The European Union (EU) will launch a digital wallet allowing citizens of any country in the bloc to make payments and access services provided by each state, also allowing for the storage of digital ID information. The wallet, which will reportedly be launched next year, could be tied in with the digital euro project, a […]

Xem chi tiết: European Union to Release Digital Wallet for Payments Next Year

Central Bank of Sweden Invites Financial Market Actors for Second Phase of E-Krona Pilot

Nigeria’s Naira Loses Ground on Forex Black Market Just a Few Days After Devaluation

Russian Lawmakers Move to Allow Crypto Payments Under Contracts

Nigeria’s Naira Loses Ground on Forex Black Market Just a Few Days After Devaluation

Danish Central Banker Tempted to Ignore Cryptocurrency — Sees Real Threat in ‘Big Tech Invading Currency Area’

White House Defends Trillion-Dollar Stimulus While Jamie Dimon and Larry Summers Warn of Runaway Inflation

South Africa Reserve Bank Commences Retail CBDC Feasibility Study

Central Bank of Nigeria Governor Says “Digital Currency Will Come to Life” but Attacks Volatile Cryptocurrencies